Asset “rich” pension less so
Discussion
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
I would probably squeeze the 58 if I could bear it. Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
LifeTIME mortgages allow some options, most release a lump sum and then allow either roll up of interest i,e. you borrow £100k and that becomes £200k due to interest added over the next 10 yrs. OR you pay the interest only OR you pay interest and capital. It may be worth considering - I know a really nice chap who specialises in this area if you want details (PM me)
I think you will get most lenders wanting to give you the lump as opposed to an amount per month.
Exciting times! Good Luck!
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
Repaying the interest each month is a must, which you have proposed anyway. Otherwise the compound interest gets you.Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
From what i've seen, incremental releases in small amounts (or as small amount as they allow) would make sense as it keeps interest payments down.
We'll likely downsize as we retire, but i can understand why would might not want to do that.
Deep Thought said:
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
Repaying the interest each month is a must, which you have proposed anyway. Otherwise the compound interest gets you.Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
From what i've seen, incremental releases in small amounts (or as small amount as they allow) would make sense as it keeps interest payments down.
We'll likely downsize as we retire, but i can understand why would might not want to do that.
If I did not have any kids or anyone I felt I owed an inheritance to I would max out the lifetime mortgage as you may as well die with as little as possible left.
Thanks for the replies. We decided a few years ago to give our daughter a “pre- death inheritance ” of sorts (which is ringfenced outside of our retirement planning).
So she is/will be set up comfortably when/if she is in a position to buy a home she will have a sizeable deposit. We would rather she have it when she is in her 20’s than her 40/50’s is our view.
She supports/knows we don’t plan to leave her anything / much financially so unlike to have any tax issues.. We seen to many people we know pass without enjoying their fruit's of their labour.
So she is/will be set up comfortably when/if she is in a position to buy a home she will have a sizeable deposit. We would rather she have it when she is in her 20’s than her 40/50’s is our view.
She supports/knows we don’t plan to leave her anything / much financially so unlike to have any tax issues.. We seen to many people we know pass without enjoying their fruit's of their labour.
Caddyshack said:
If I did not have any kids or anyone I felt I owed an inheritance to I would max out the lifetime mortgage as you may as well die with as little as possible left.
My FIL intended to die broke and he maxxed out the money he could get from his house - then a few years later MIL died. He didn't want to stay in the house (it had a big and complicated garden that was very much hers) but downsizing became very awkward as he owed so much against the house made worse that it had been quite over-valued (it was a one-off property).
We ended up having to chip in so he could buy another place.
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
Why do you need 5k a month for a comfortable retirement? Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
No mortgage, 1 car to run and you could quiet easily be fine on 3k.
Caddyshack said:
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
I would probably squeeze the 58 if I could bear it. Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
LifeTIME mortgages allow some options, most release a lump sum and then allow either roll up of interest i,e. you borrow £100k and that becomes £200k due to interest added over the next 10 yrs. OR you pay the interest only OR you pay interest and capital. It may be worth considering - I know a really nice chap who specialises in this area if you want details (PM me)
I think you will get most lenders wanting to give you the lump as opposed to an amount per month.
Exciting times! Good Luck!
You can draw down amounts at a time. I doubt they'll let you draw down say £2K per month, but they may let him draw down say £10K at a time. Thus avoiding interest charges on money he doesnt need.
O/P - theres a guide from Martin Lewis on it...
https://www.moneysavingexpert.com/mortgages/equity...
Sheepshanks said:
.. it had been quite over-valued (it was a one-off property).
We ended up having to chip in so he could buy another place.
Good point that’s a big risk as our property is unique kind of rural property / large high maint garden that needs regular care and attention… and I dare say a year/or two of neglect would make it difficult to sell… I guess the mitigation is not to borrow too much against the property (I am thinking 25% ish and been a few years ahead off the cliff edge before selling). Someone pointed out that it’s a good ideal-to downsize well before you need to just think hope waiting to 65 isn’t too long!).We ended up having to chip in so he could buy another place.
I don’t want to derail the spirit of the thread as I know the £x figure a month is a moot point (and well discussed), my parent FIL has a great lifestyle with just his state pension and a dc of £300 a month ?? do we need £5k a month NO would we like it yes… it’s all relative I guess but, if I am been honest with myself it’s nice to have a plan/provision on how to get some extra a month.
Edited by GTIfarmer on Monday 12th February 13:30
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
Assuming your monthly numbers are robust then if you could stick it out until 58 that perhaps is the " easiest " option.Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
I had looked at giving up paid work from around 50 but each time I did the numbers (or looked at getting a CETV for my DB Scheme ) found it didn't necessarily allow me ( my wife doesn't work as such ) to keep our existing lifestyle the same which was a prerequisite.
At 59 , the numbers aligned and I retired a week after my 60th.
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
You can't afford to retire - it's as simple as that IMO. I fear you'll get eaten alive by inflation.Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
Waddayamean??
Look up the "indexation" detail on that/those DB pensions and report back.
What age does the DB become available? What early retirement factor is applied if you draw it before normal retirement age?
And this £1k a month from DC; what size "pot" are we talking about?
GTIfarmer said:
Wife and I 52 wish/thinking to retire in 3 years both will have a mixture of DB £2k circa £1k DC a month.
Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
I would look at putting your DC pensions into drawdown and take out the 25% at 55 as well as overdrawing on capital short term until you downsize and state pension kicks in. You can then reduce your annual take from your DC pension at that stage. Also I presume you will have an option to take a lump sum out of the DB pension at 55 too? You have a lot of options and I would think you do not need a lifetime mortgage.Done our sums and would leave us £1k-£2k short to fund a comfortable lifestyle.
2 options ( well 3 I guess live on £3k)
1) Both work until we are 58 where our model brings us to our comfortable lifestyle. But we are pretty exhausted tbh and no longer enjoy corporate life.
2) I heard but not explored yet lifestyle mortgages …. (Heard it on a podcast) We will own our property in 3 years value £800k. We love our home and don’t want to downsize for another 10 years (as the garden/mait would probably be too much on us if the following years 65 plus.
Could we incrementally release say £1k -£2k a month / or a lump sum… (pay interest only on it each month) has anyone had any experience good/bad. Feel like seems too good to be true. Crude maths £25k a year release over 10 years £250k. We sell up at 65 ish move to a £500k property job done with the state pension kicking it at 67 ish.
Welcome critique.
GTIfarmer said:
.do we need £5k a month NO would we like it yes… it’s all relative I guess but, if I am been honest with myself it’s nice to have a plan/provision on how to get some extra a month.
I'm older and am on the edge of retirement and our planning assumption is £5K/mth net. Been looking at our current day-to-day spending, bills etc, but nothing for capital costs, depreciation, holidays etc, and that's £2500/mth. I'd say we have a comfortable, but fairly basic, lifestyle. £3K would leave me very twitchy.Sheepshanks said:
I'm on the edge of retirement and our planning assumption is £5K/mth net. (for everything)
Been looking at our current day-to-day spending and that's £2,500/mth. I'd say we have a comfortable, but fairly basic, lifestyle.
£3K (for everything) would leave me very twitchy.
Agreed.Been looking at our current day-to-day spending and that's £2,500/mth. I'd say we have a comfortable, but fairly basic, lifestyle.
£3K (for everything) would leave me very twitchy.
phil-sti said:
Why do you need 5k a month for a comfortable retirement?
No mortgage, 1 car to run and you could quiet easily be fine on 3k.
Different strokes for everybody - but £3k / PCM is all fun and games until your boiler goes and you spend that £3k, and then some, on a replacement.No mortgage, 1 car to run and you could quiet easily be fine on 3k.
For me, any couple in early 50s , nearly paid off 800K house and pensions worth 3K a month net .....and don't have enough savings put away for a 3K ch boiler unexpected bill ....... would not be "planning" for anything like retirement . I strongly doubt the OP and partner are in that category .
Anyway, retiring early on a "reasonable" pension income, one would assume a fairly health saving position would be needed ... a year or two "income" equivalent on hand or very nearly so ?
Anyway, retiring early on a "reasonable" pension income, one would assume a fairly health saving position would be needed ... a year or two "income" equivalent on hand or very nearly so ?
PM3 said:
For me, any couple in early 50s , nearly paid off 800K house and pensions worth 3K a month net .....and don't have enough savings put away for a 3K ch boiler unexpected bill ....... would not be "planning" for anything like retirement . I strongly doubt the OP and partner are in that category .
Anyway, retiring early on a "reasonable" pension income, one would assume a fairly health saving position would be needed ... a year or two "income" equivalent on hand or very nearly so ?
I guess that's the point of the thread - in place of savings he's looking to pull money out of the house.Anyway, retiring early on a "reasonable" pension income, one would assume a fairly health saving position would be needed ... a year or two "income" equivalent on hand or very nearly so ?
Sheepshanks said:
PM3 said:
For me, any couple in early 50s , nearly paid off 800K house and pensions worth 3K a month net .....and don't have enough savings put away for a 3K ch boiler unexpected bill ....... would not be "planning" for anything like retirement . I strongly doubt the OP and partner are in that category .
Anyway, retiring early on a "reasonable" pension income, one would assume a fairly health saving position would be needed ... a year or two "income" equivalent on hand or very nearly so ?
I guess that's the point of the thread - in place of savings he's looking to pull money out of the house.Anyway, retiring early on a "reasonable" pension income, one would assume a fairly health saving position would be needed ... a year or two "income" equivalent on hand or very nearly so ?
iphonedyou said:
phil-sti said:
Why do you need 5k a month for a comfortable retirement?
No mortgage, 1 car to run and you could quiet easily be fine on 3k.
Different strokes for everybody - but £3k / PCM is all fun and games until your boiler goes and you spend that £3k, and then some, on a replacement.No mortgage, 1 car to run and you could quiet easily be fine on 3k.
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